VIETNAM Railways (VNR) has been directed to develop a project to build a railway manufacturing complex in Hanoi, where components, rolling stock and track materials would be produced to support metro, mainline and high-speed projects.
This follows a prime ministerial decision to allocate a 250ha site for the project, located in the Chuyên Mỹ and Ứng Hòa districts of Hanoi. VNR is now appointing consultants to prepare a pre-feasibility report, providing a detailed assessment of financing options, incentive mechanisms and the potential for mobilising resources other than government funding, which could include public-private partnerships (PPP).
According to studies conducted by a consortium of Vietnamese consultancies CCTDI and TEDI, the size of the new complex has been determined on the basis of long-term demand forecasts. Vietnam’s updated 2021-2030 national railway masterplan includes the construction of 17 new lines by 2030, with 19 more to follow post-2030, while metro lines are under construction in Hanoi and Ho Chi Minh City.
Domestic manufacturing capacity is extremely limited at present. Only the Gia Lâm plant in Hanoi and the Dĩ An facility in Ho Chi Minh City manufacture rolling stock, with expansion of the 20ha Gia Lâm site hampered by its inner-city location.
The new complex would be organised into 17 functional zones, covering nearly the entire value chain. Turnout production would be carried on a 20ha section of the site, with locomotive assembly allocated 15ha. Other activities would include the production of wagons, car bodies, EMUs, and high-trains, as well as train interiors and air-conditioning systems. Research and testing facilities and a training centre would also be provided.
VNR expects that production would initially focus on assembling and refurbishing diesel locomotives, as well as manufacturing coaches and wagons for the existing network. New construction projects including metro lines would continue to partially rely on imported rolling stock and other equipment, alongside domestic assembly.
Subsequent phases would aim to establish production of passenger rolling stock for operation at up to 160km/h and assembly of electric locomotives with 30% domestic content. This proportion is considered to be feasible given the current state of development of the domestic supply chain.
In order to encourage private investment, it is expected that the government would invest in the core infrastructure of the site, including internal railway connections, with companies leasing sites or factory space to reduce upfront investment costs. Manufacturers would also benefit from reduced rents and tax incentives.
“A 250ha railway industrial complex is not merely a factory construction project,” says Hoàng Văn Triệu of the Institute for Railway Technology Research and Development.
“It is a strategic component in efforts to form a modern railway industry, reduce dependence on imports and gradually integrate more deeply into the regional value chain.”
